NRA Declares Bankruptcy

As has been reported, America’s oldest gun rights organization, the National Rifle Association (NRA) is in the midst of unprecedented legal and financial turmoil. With pending lawsuits against the NRA in New York and Washington, D.C., litigation expenses are adding up. The company, chartered in New York since November 17, 1871, filed for Chapter 11 Bankruptcy in the United States Bankruptcy Court for the Northern District of Texas on January 15, 2021. The announcement was made by a letter from CEO Wayne LaPierre to the NRA’s 76-member Board of Directors, and the news spread quickly.

In 2020, investigations by the Attorneys General of New York and Washington, D.C. produced lawsuits in both jurisdictions. Though these two officials are no friends to gun owners, the specific details outlined in the complaints [https://ag.ny.gov/sites/default/files/summons_and_complaint_1.pdf] are many.  

The ongoing legal problems have led to exorbitant legal fees, which has drained the NRA’s coffers. Despite public statements of financial strength, dozens of employees at the NRA’s Headquarters in Fairfax, Virginia, were laid-off or furloughed in 2020. Tax records indicate that the NRA ran a $12.2 million deficit in 2019, making the 2021 bankruptcy a predictable result.

The NRA owns a Texas-based Sea Girt, LLC, which also filed for bankruptcy. It’s unclear if this bankruptcy will help the NRA move past the New York suit. On Thursday, January 21, 2021, a state court judge allowed that case to move forward.

“It would be inappropriate to find that the attorney [general] couldn’t pursue her claims in state court just because one of the defendants wants to proceed in federal court,” said Judge Joel Cohen during the hearing.

According to court documents [https://www.klkntv.com/content/uploads/2021/01/doc-001-NRA-Bankruptcy-Filing.pdf], the NRA’s largest creditor is Ackerman-McQueen, the same agency at the center of the investigations in New York and Washington. Ackerman-McQueen, and its affiliates Mercury Group and Under Wild Skies, are allegedly owed more than $2 million by their former client. The NRA disputes this amount and is seeking damages in a separate lawsuit against the longtime vendors. Another $1.4 million is reportedly owed to the firms headquartered inside the NRA’s headquarters.

The NRA, which has claimed to be in its “strongest financial condition in years,” is asserting that the news of its bankruptcy marks a fresh chapter in the organization’s history that will help it move beyond its legal issues. The NRA will reportedly move its headquarters to Texas. The NRA may not escape the increasing dissatisfaction with LaPierre and his loyalists on the Board of Directors. If New York’s and Washington’s attorneys and politicians get there way, a change may come sooner rather than later.